BSP: OFW Households Have More Savings than Investments
MANILA: Filipino households, who receive remittances from their loved ones abroad, saved more but invested less in the third quarter, a Bangko Sentral ng Pilipinas (BSP) survey has pointed out.
Results of the Consumer Expectations Survey (CES) for the 3rd Quarter 2016 showed an increase in the number of overseas Filipino workers’ households allocating remittances for savings to 39.6 percent in the third quarter of the year from 38.6 percent in the second quarter, Philippine Star quoted Teresita Deveza, deputy director of the BSP’s Department of Economic Statistics (DES), as saying.
“Overseas Filipino workers households that utilize their remittances for savings increased for the third quarter of 2016,” she reportedly said.
The percentage of OFW households using remittances to save as of the second quarter was more than five times the 7.2 percent recorded in the first quarter of 2007 when the CES was launched, the report said.
On the other hand, Deveza reportedly said the number of households that allocated remittances for investments declined to 3.8 percent in the third quarter from 4.5 percent in the second quarter.
Despite the decline, the percentage of OFW households investing a portion of their remittances now is still better than the 2.3 percent level when the survey was first conducted.
Of the 500 households included in the survey that received OFW remittances for the third quarter, 95 percent used the remittances that they received to purchase food and other household needs, said the news portal.
About 39.8 percent allotted part of their remittances for debt payments, while 20.2 percent used the money that they received to purchase consumer durables.
Furthermore, 67.6 percent of OFW households reportedly allocated part of their remittances for education, 55.2 percent for medical expenses, 10.2 percent for the purchase of house, and 6.4 percent for the acquisition of motor vehicles.
BSP Deputy Governor Diwa Guinigundo was quoted as saying that OFW households decided to save more as the spending outlook index of households on basic goods and services declined to 27.8 percent for the fourth quarter of 2016 from 30.2 percent in the previous quarter.
“This means that even as majority of respondents continued to expect higher spending on basic goods and services, the number that said so declined compared to a quarter ago, indicating that growth in consumer spending could slow down in the near term,” he reportedly said.
Guinigundo said respondents anticipated inflation to decline to 1.8 percent from 3.4 percent reflecting their lower inflation outlook over the next 12 months.
“This indicates that inflationary expectations are likely to moderate over the next 12 months as the number of respondents with views of higher inflation declined compared to a quarter ago,” he was quoted as saying by Philippine Star.
Likewise, fewer respondents expected interest rates to increase. The 3rd Quarter CES survey also showed the confidence of Filipino consumers turned positive for the first time in nine years as the confidence index soared to a new all-time high 2.5 percent in the third quarter from -6.4 percent in the second quarter, the report said.
(Source: FilipinoTimes.ae)